Exemption from excise duty under S. No. 10 of notification No. 30/2004 the Raymond case – Board reacts (See 'DDT')

Govt exploring 'forest credit' scheme to improve forest cover in country;

India, Myanmar sign four pacts to improve economic ties;

CBEC holds DPC for ad hoc promotion to Commissioner; Total vacancy considered is 48; 12 kept aside for promotee officers' future promotion;

Nagaland gets UN Award for innovative public service scheme;

Vodafone deal: Final round of hearing begins in Bombay HC; Vodafone denies capital gains tax liability;

ddt 24 june.pdf

Deemed exports – no refund of CENVAT Credit – Board communicates TIOL case law;

icecube.pdf

Coal-to-oil initiative should spark vision on energy options;

THE INSIDER

CITs' transfer order only after new Chairperson takes over?

mbuzz738.pdf

Conference Room of Finance Commission inaugurated ;

mbuzz737.pdf

NTPC gets Star PSU Award ;

mbuzz736.pdf

Services sector received max FDI last fiscal: Nath ;

2008-TIOL-323-HC-P&H-IT.pdf

CIT, Chandigarh-II Vs Sh Tikka Ram (Dated: May 6, 2008 )

Income Tax - Unexplained investment - Notice u/s 148 - Assessee dies - Penalty initiated against legal heir (assessee's wife) - Legal heir surrenders the investment to buy peace with Revenue - Since the assessee who died never exercised the option of explaining the investments and legal heir being unaware of the circumstances, the voluntary disclosure made by the legal heir is bona fide and deletion of penalty by the Tribunal upheld - Revenue's appeal dismissed : P & H HIGH COURT ;

2008-TIOL-322-HC-P&H-IT.pdf

CIT, Hisar Vs Sh Balwant Rai Prop (Dated: May 15, 2008)

Income Tax - Excess stock of Sarson detected by a Flying Squad of Market Committee - AO makes additions on basis of their report - Assessee surrenders some amount but contests against penalty u/s 271(1)(c) - Tribunal deletes penalty - No flaw in Tribunal's order which clearly notes that the AO did not verify the claim of the assessee that all the stock details were disclosed in the books of account and also affidavits of agrculturalists were filed but not verified - Revenue's appeal has no leg to stand : P & H HIGH COURT ;

2008-TIOL-270-ITAT-DEL.pdf + honda story.pdf

M/s Honda Siel Cars India Limited Vs ACIT, Noida ( Dated : May 16, 2008 )

It is well-settled that initial expenditure to set up a business or expenditure incurred to install the frame-work of the business must be treated as capital. The test that is to be applied in such cases is only whether the assessee obtained any proprietary rights in the technical know-how or he merely obtained the right to use the same for the purpose of his business for a limited period of time, irrespective of whether the expenditure was incurred at the time of initiation of the business or at any point of time subsequent thereto.

Expenditure incurred wholly and exclusively for the purposes of the business does not cease to be so merely because it also benefits some other persons. So long as the expenditure benefits the assessee it should be allowed as a deduction. The CIT (Appeals) has stated that there was no increase in the sales. This is not a relevant criterion. The association of the assessee company with the advertisement scheme launched by Nerolac Paints and the assurance of giving away a Honda car at its own cost to the winner may be beneficial to the assessee in the long run. It cannot be denied that it had advertisement value. Expenditure incurred on advertisement is undisputedly business expenditure. The ground is allowed.

The mere fact that some enduring advantage results by the incurring of the expenditure does not mean that the expenditure must be treated as capital expenditure. It is common knowledge that the models and design of passenger cars in the present days are changing frequently depending upon the taste of the customers and the competition. Therefore, a particular design or removal of a particular defect in the design of the cars cannot be said to confer any enduring advantage to the assessee company. Even assuming that there is some enduring advantage, the advantage is in the revenue field and not in the capital field. The cars are the stock-in-trade of the assessee. They are not part of the plant. The stock-in-trade must be made more attractive and safe from the point of view of the customers and any expenditure towards this end can only be regarded as revenue expenditure. Thus, the enduring benefit, if any, is not in the capital field. It is well settled that every expenditure that confers some enduring advantage cannot be regarded as capital expenditure.

If the provision has been made for a known liability that has already arisen during the relevant previous year, the same cannot be regarded as a provision for a contingent liability. It is contended that the provision was for an unascertained or contingent liability based on estimate and not on actual expenditure and that the assessee did not have the supporting bills and vouchers for the same. Before the Assessing Officer, it was submitted that the assessee had to advertise its products on a continuous basis and, therefore, has to incur the expenditure. It was specifically pointed out that the liability has already been incurred by the company during the relevant previous year and since the invoices were not received till finalization of the account, a provision was made and it was claimed as a deduction. The Assessing Officer was not satisfied with the assessee's explanation and disallowed the provision. On appeal, the CIT (Appeals) noticed that the amount of the provision included Rs.5 ,53,54,052 /- which had been actually paid in the subsequent year and debited against the provision. He further found that the Assessing Officer has misunderstood this as a writing-back of the provision. He further found that the provision was made in respect of work actually done for the assessee during the relevant accounting year and thus held that it was in respect of an ascertained liability and only the amount remained unknown.

The mere fact that the life of the repaired roof was guaranteed to be for ten years does not mean that any asset of enduring nature was received by the assessee. The roof was originally constructed in 1997. In the course of five years of its existence, it had developed problems in the joints and vertical openings with the result that there was water leakage and consequent danger of the machinery in the factory getting damaged. This would have affected the quality of the production and also damaged the machinery. The assessee therefore got the roof repaired. The expenditure is quite substantial because the roof covers an area of 23,000 sq.mts . It is not the amount of the expenditure that is decisive in such matters. It is the object for which the expenditure was incurred that is most relevant. Here, the object was to repair and restore the five year old roof to its original leak-proof condition. Thereby no capital asset was created. The ultimate object was to protect and preserve the plant and machinery on the shop floor. :DELHI ITAT;

2008-TIOL-269-ITAT-DEL.pdf

M/s Fashion Accessories Vs ACIT, Gurgaon ( Dated : March 19, 2008 )

Income Tax - Assessee claims 100% depreciation against building development - AO restricts it to 10% as per the law - Assessee's appeal dismissed as this issue was settled against the assessee itself in an earlier case :DELHI ITAT;

CENTRAL EXCISE SECTION

deemed_export.pdf

“Deemed Export” of goods to 100% EOU by DTA units-applicability of refund of unutilized CENVAT credit under Rule 5 of CENVAT Credit Rules, 2004-reg ;

exemption.pdf

Exemption from excise duty under S. No. 10 of notification No. 30/2004-CE dated : 09.7.2004-regarding;

CASE LAWS

2008-TIOL-985-CESTAT-AHM.pdf + sarla story.pdf

M/s Sarla Polyester Ltd Vs CCE, Vapi (Dated : March 10, 2008)

100% EOUs – DTA clearances - Education cess is payable on the aggregate duties of excise payable under the proviso to Section 3 of the Central Excise Act read with Notification 2/95 CE – the nature of duty under Section 3 is only Central Excise duty and education cess is leviable under Clause 83 of the Finance Act on all excise duties : AHMEDABAD CESTAT;

2008-TIOL-984-CESTAT-MAD.pdf

CCE Chennai Vs V T Dyers & Screen Printers (Dated : April 24, 2008)

Central Excise – duty demand on independent textile processor on the basis of Annual Capacity of production – the Commissioner (Appeals) order keeping the case in call book is set aside as the case law relied is not applicable and he is directed to dispose of the appeal in accordance with law : CHENNAI CESTAT;

2008-TIOL-983-CESTAT-AHM.pdf

CCE, Surat Vs M/s Meghmani Organics Ltd (Dated : May 14, 2008)

Central Excise - Clandestine removal - DC confirms demand and imposes penalty - Revenue for enhancement of penalty amount - As per settled decisions, penalty amount to the extent of 25% is justified and in this case it is more than that - Revenue's appeal dismissed : AHMEDABAD CESTAT;

SERVICE TAX SECTION

2008-TIOL-981-CESTAT-DEL.pdf

M/s Narottam & CO Vs CCE, Jaipur -I (Dated : May 13, 2008)

ST - C&F Service - Assessee argues that the sum received for handling of goods from the Principal is not includible - As per Large Bench decision the amount received for even isolated activity is taxable - however, since the assessee pleads limitation, pre-deposit ordered and stay granted : DELHI CESTAT;

2008-TIOL-980-CESTAT-DEL.pdf

CCE, Chandigarh Vs M/s Roshan Lal Ravi Decorators (Dated : March 17, 2008)

ST - Notification No 12/2003-ST - Abatement for value of goods sold to the service recipient - Since the Notification does not specify any specific document for allowing the benefits, Commissioner(A) accepting the CA Certificate is quite reasonable - Revenue appeal rejected : DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

cnt08_074.pdf + cnt08_075.pdf + cnt08_076.pdf+ cnt08_077.pdf

CBEC appoints adjudicating authorities for DRI cases;

CASE LAWS

2008-TIOL-127-SC-CUS.pdf + sc cus story.pdf

Hari Prasad Chhapolia Vs UoI (Dated: June 20, 2008)

Gold seized in 1984 – sentenced to 2 year imprisonment – appeals to Supreme Court; appellant dies – late application by heirs – Appeal abates on the death of appellant - need not go into the question as to whether there is scope for condonation of delay as no acceptable explanation has been offered for the delayed presentation. Several times the matter was adjourned at the request of counsel who appeared for the original appellant. The plea that the legal heirs did not know the requirement is clearly without any substance. The appeal has abated on the death of the appellant and is disposed of accordingly. : SUPREME COURT;

2008-TIOL-982-CESTAT-AHM.pdf

M/s Gujarat Ambuja Exports Ltd Vs CC, Kandla (Dated : February 21, 2008)

Customs – DEPB – conversion of duty free shipping bills into DEBP shipping bills – at the time of export DGFT did not allow DEBP on Soyabean Meal Extraction which was later allowed as the DEPB committee reconsidered the issue - such view is clarificatory in nature and is applicable to all times – impugned order denying the conversion of shipping bill is set aside. : AHMEDABAD CESTAT;